having each application install its own version of common libraries in its own location sounds to me like a maintenance nightmare.
Having to worry that some of the applications you have installed will break whenever you upgrade any module is also a maintenance nightmare. In the end, you should be able choose which kind of nightmare you prefer, ;-) which may depend on your situation. A user who just wants to install one blog application is not in the same situation as a webmaster maintaining several applications.
A good compromise could be to provide both options: a standard CPAN package that lets you install the dependencies separately wherever you want, and a "user-friendly" bundle that you can just unwrap and works out of the box.
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